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Supply Response to Policy Changes: Evidence from Indian Oilseeds Sector

Author

Listed:
  • D. Suganthi

    (Department of Economic and Policy Research, Reserve Bank of India)

  • Rishabh Kumar

    (Department of Economic and Policy Research, Reserve Bank of India)

  • Prachi Rojh

    (Glencore India Pvt Ltd)

  • N. Arun Vishnu Kumar

    (Department of Economic and Policy Research, Reserve Bank of India)

Abstract

Despite increasing oilseeds production, India imports more than half of its edible oil consumption. Dependence on imported edible oils results in price fluctuation, affecting consumers and producers. This study aims to identify key price and non-price drivers of the oilseed supply response using the Nerlovian supply response model. The findings reveal that global prices during sowing months, own support price and that of competitive crops, lower cost of cultivation and higher profitability boost domestic acreage. In the long run, development of irrigation infrastructure and high-yielding varieties are imperative for increasing production. Furthermore, the paper explores the factors that affect farm business income and demonstrates that, historically, improvement in productivity has supported farmers’ income, despite unfavourable trends in market pricing.

Suggested Citation

  • D. Suganthi & Rishabh Kumar & Prachi Rojh & N. Arun Vishnu Kumar, 2025. "Supply Response to Policy Changes: Evidence from Indian Oilseeds Sector," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 23(2), pages 577-599, June.
    • Handle: RePEc:spr:jqecon:v:23:y:2025:i:2:d:10.1007_s40953-024-00434-6
    DOI: 10.1007/s40953-024-00434-6
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